Concerns that the recently implemented Agency Workers Regulations would dissuade employers from hiring PAYE umbrella contractors appear unfounded, according to the latest JobsOutlook report from the Recruitment and Employment Confederation (REC).

The Regulations grant temporary workers the same employment rights as permanent staff after twelve weeks and were designed to protect the most vulnerable temps from exploitation and poor wages. Contractors working through umbrella companies, although hired on temporary contracts, are invariably highly skilled professionals and many were concerned that the AWR would discourage employers from using their services.

However, the EU directive does not appear to have put employers off their use of contractors as feared, with 82% of them planning to maintain or increase their contractor and temporary worker staffing levels over both the short term and the long term. Whilst this represents a slight fall on last month’s percentage, the REC believes the figures show that employers are not planning to cut their use of contactors as a result of the AWR.

Roger Tweedy, Director of Research at the REC, said “The underlying trend this month is one of improvement in employers’ optimism about their future hiring intentions. Though the overall scores have only fluctuated slightly over the past month, the last three months of data show that there are definite signs that confidence is returning.”

He conceded that employers may “err on the side of caution” when shaping their workforces, but added that feedback from recruiters consistently reveals that many UK businesses are still seeking workers with the right skills. ”This explains the slight upturn in hiring intentions and confirms that job opportunities are still out there,” he said.

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